Tesla Cancels Model 2 Development
After Delaying New Model Y Launch
Company Shifts Focus to Full Self-Driving
Tesla is expected to scrap its development plans for its budget-friendly electric vehicle (EV), the Model 2. Three years ago, Tesla CEO Elon Musk announced that he would build a $25,000 EV, but until recently, no specific development news or production schedule had been released, leading to suspicions that the production plan had been canceled.
In April of this year, Reuters reported that the Model 2 launch had been canceled, but Musk denied this and until recently kept the possibility of a launch open. However, during Tesla’s earnings conference, he made a statement that overturned this.
Budget-Friendly EV Launch Deemed Pointless
Plans Effectively Scrapped
At the earnings conference, a shareholder inquired about the anticipated launch of a $25,000 non-robotaxi EV. Musk sidestepped the question, instead highlighting Tesla’s commitment to autonomous technology as the company’s future, a vision he stressed Tesla has promoted for years.
Musk went on to explain why Tesla’s robotaxi, the Cybercab, represents a revolutionary step in production. He argued that introducing a standard $25,000 model would be “pointless” and “silly” as it would contradict Tesla’s core philosophy. This statement effectively hinted that plans for the Model 2 launch may have been scrapped.
Focus Shifts to $30,000 Robotaxi with Full Self-Driving Capabilities
At Tesla’s “Battery Day” in 2020, Musk announced plans to develop a $25,000 EV equipped with full self-driving capabilities within about three years. The cancellation of this initiative appears to be linked to Tesla’s planned two-seater electric robotaxi. Tesla has previously indicated that this robotaxi, featuring full self-driving technology, would be priced around $30,000.
The price difference between the anticipated $25,000 Model 2 and the robotaxi is only $5,000. As a result, Musk seems to regard the development of a low-cost EV lacking full self-driving capabilities as pointless. However, it remains uncertain whether Tesla can launch the robotaxi by its target date of around 2026.
Robotaxi Commercialization Faces Challenges
Expected to Take at Least 10 Years
Experts predict it will take at least 10 years to achieve Level 5 self-driving, which would allow full self-driving. Even if Tesla succeeds in developing the technology, it is expected to take at least several more years until commercialization. This is because the approval process must be carried out according to road conditions in each country, which is expected to take a considerable amount of time.
Tesla is reportedly working to certify its core FSD (Full-Self-Driving) technology in China. However, the launch remains uncertain as it has yet to receive approval from the Chinese government. Tesla has stated that no Model Y refresh (Project Juniper) release will be released this year, indicating a focus on the robotaxi. However, the company has faced criticism for not providing detailed plans regarding the robotaxi’s launch and approval process.
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